How to Slow Down a Thriving New Company

The emergence of Tesla Motors in the mass market has created many problems in a place where there weren’t any. Traditionally, new automobiles are sold through franchised dealerships. Tesla bucks that trend by offering a different pathway of ownership.

Tesla Motors has ditched the idea of a dealership and decided to push their vehicles through their own retail locations. In those retail locations they offer the ability to try out the car, but most purchases are completed online after the in-store experience. By doing this, Tesla cuts out the middle-man of dealerships, can sell their cars for a lower price, and controls the purchases of their cars from the factory to the consumer’s hands.

This all sounds like a wonderful and innovative idea, but unfortunately not everyone shares this opinion.

On Oct. 21, Rick Snyder signed into law a bill that stops Tesla from selling their cars like this in the state of Michigan. The law makes it illegal to sell a car in Mich. unless it is being sold through a franchised dealer. Tesla is directly targeted in this law because they are the only car company that doesn’t sell cars through dealerships.

The state Congress and Governor tried to keep this as low key as possible. The ban was written in at the last second as an add-on to a bill and was then quickly ushered to Snyder to sign into law.

Half the states in the union have passed similar directives that accomplish the same goal. None of the laws directly mention Tesla, but they are the only company affected by this controversial law.

Car dealers around the country are responsible for this egregious piece of legislation. Tesla is an up and coming company and one day could become a serious competitor to companies such as Ford, GM, and Chrysler.

“This is an embarrassment for the State of Michigan and democracy,” said Daniel Crane, a law professor at the University of Michigan. “When nobody was watching the dealers slipped this language into the bill, and told Snyder to pass it so they would have an advantage over Tesla in the future.

Snyder and members of Congress were under great pressure from car dealerships to pass this bill. It is election season and they didn’t want to risk the possibility of being featured in attack ads supplied by dealerships. There really isn’t any reason for this law beyond making it easier for dealers in the state to pull in a little bit more profit.

Now that something like this is law, I have a few questions about what this could lead to. Tesla is not the only company to sell directly to consumers. The Nike Store in cities such as Chicago and San Francisco are built on the same idea that Tesla is utilizing. How come their stores haven’t been banned across America?

Tesla being banned from selling cars the way the want to is purely a result of no-good politics and greed. I believe the ban should be fought and I hope that Tesla comes out on top when all is settled and done.